Derek Alexander sensed that he and his fellow board members at the Kew Gardens Terrace co-op in Queens were facing a once-in-a-lifetime opportunity. The century-old, six-story Tudor building’s roof was a goner, so Alexander asked himself: If we install solar panels while replacing the roof, how much would that cut our energy costs? And will it be enough to bring us into compliance with the looming demands of the Climate Mobilization Act?
Before pursuing answers, Alexander made a vow: “We were not going to ram good things down people’s throats.”
So the board embarked on a methodical campaign to figure out ways to reduce energy usage and carbon output — and then, crucially, to get the 107 shareholders to buy into the vision.
The first phase of the campaign was to hire Stone Engineering & Architecture in late 2018 to survey all building systems, which became the basis for a long-range capital plan. The co-op’s management company, FirstService Residential, determined that if no work was done on the building’s existing systems, the co-op would face a $10,000 fine in 2025 under the Climate Mobilization Act. The board decided to bring in the nonprofit Solar One to assess if the building was a good candidate for solar panels, as well as the costs, incentives and potential savings.
“We liked Solar One not only because of their track record,” Alexander says, “but because they seemed to have the best understanding of the legal, regulatory and tax landscape.”
That landscape was critical to the project’s viability. Solar One determined that the building’s large roof and lack of shadows made it a good candidate for solar. Then it prepared a cost-savings estimate, including grants and tax incentives. By late 2019, it was time to take the proposal to the full board.
“Typically there’s one person on the board who’s a solar champion,” says Noah Ginsburg, a program director at Solar One. “In this case it was Derek. When he brought us in to talk to the full board, that was a crucial moment. Some people were concerned about the technology, others about dollars and cents. We have to address all questions and objections.”
The board was on board, unanimously. “At this point we had board buy-in,” Alexander says, “but we needed to let shareholders know where our heads were.” So the board’s extensive written communications with shareholders now included explanations of the solar project, the likely costs and benefits, the pros and cons. The board also began to host freewheeling informational meetings.
“At the informational sessions we let it all hang out,” Alexander says. “People were looking at the same Solar One material the board was looking at. We were determined to be honest about something that was good but not necessary.”
The numbers were tantalizing. A $56,500 grant from the New York State Research and Development Authority would reduce the contractor’s cost. Also available was a federal income tax credit of $5,000 to $10,000 per unit; a one-time state income tax credit; and a city property tax abatement equal to 20% of the project cost, spread over four years. The projected savings on electricity bills would be about 40% per unit. Some energy-conscious shareholders would pay nothing. The $380,000 project (before incentives) would pay for itself in less than three years. The downside: Even with the breaks, the project would require a 50% increase in monthly maintenance, which would bring the co-op’s artificially low costs in line with the neighborhood average.
“There was a lot of sticker shock,” Alexander says of initial shareholder reaction to the proposed maintenance increase. “But there was also a realization that if we didn’t start investing in the building, we would be screwing ourselves on our resale values.”
Finally, at the annual meeting in December 2019, the board conducted a straw poll to gauge shareholder sentiment. Just shy of 90% voted in favor of moving ahead with the project. For Alexander, the vote was sweet vindication. “That told us that people understood the need, and they understood the solar solution,” he says. “That gave the board the courage to go ahead with a project that was optional, promising but not guaranteed, costly but likely to have a substantial payback. It was a good bet, but not a sure thing.”
The board promptly sent out requests for proposals prepared by Solar One, then hired Best Energy Power to do both the roof replacement and solar installation. Despite the obstacles presented by the pandemic, the job was completed in the spring of 2021, and the co-op’s electric bills promptly began to shrink.
“I learned a hell of a lot from this project,” Alexander says. “You must start with a need and an open mind. Then turn to the finances and accept that if you can’t explain the project well enough to get your neighbors to buy in, it might not be the thing to do. Shareholder communication was the only reason we had shareholder buy-in”
Today, nearly 400 solar panels sit on a roof that is insulated for the first time, and Kew Gardens Terrace is ahead of the pack in complying with the Climate Mobilization Act. But Alexander is not one to pretend that this project’s main driver was anything other than raw economics.
“Environmental considerations aside,” he says, “this is a paying idea. The bottom line is that 40% of our electricity consumption is coming off our roof. I’m happy about the environmental benefits, but I view this first as dollars and cents. This is like having solar energy as our commercial tenant.”